Oil sands production in Canada could take weeks to return to previous levels following the ongoing wild fires that have been ravaging Fort McMurray.
The temporary shutdown of the area’s production sites continues however some projects are slowly restarting as the fires subside. The EIA estimates that disruptions to oil production averaged around 800 thousand barrels per day in May, with a daily peak of more than 1.1 million barrels per day.
Despite the restart of some projects, it could still take weeks for production to return to previous levels. The EIA expects disruptions to average 400,000 barrels per day in June.
The oil sands facilities are located mostly to the north of the fires and were not initially threatened by the fires. However, as winds pushed the fires northward, oil sands facilities and work camps had to be evacuated. Oil sands production companies operating near Fort McMurray either shut down completely or operated at reduced rates.
The fires have not been contained but have moved away from Fort McMurray, but dangerous air quality conditions at facilities and surrounding towns have slowed the return of workers. As conditions have improved, facilities located further north of Fort McMurray have begun to restart production, albeit not at full capacity.
However, the wildfires have not significantly affected the regional crude oil price, Western Canadian Select.
At the end of May Enbridge started a staged return to Fort McMurray. At the end of May its Athabasca and Cheecham Terminals were operating with a full complement of staff.